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  • Higher Education in New Zealand: What might the UK learn?

    Sam Cannicott

    HEPI Report 87

  • About the Author

    Sam Cannicott was the Education Policy Adviser for the Liberal Democrats from 2007 to 2010. During this period he worked on policies, including a pupil premium for schools in England, which were implemented by the Coalition Government from 2010. Sam also worked on alternative proposals designed to move the Party away from its opposition to university tuition fees, though without complete success.

    From 2012 to 2015, Sam was a Policy and Strategy Adviser at Regent’s University London, a private university awarded university title in 2013.

    A graduate of the University of Nottingham, Sam has written for Total Politics, HE and Wonkhe. In 2013 he wrote Smarter Accountability in Further Education, which was published by CentreForum, a UK think tank.

    Sam is a New Zealand citizen and moved to Wellington from the UK in 2015 where he works for Statistics New Zealand.

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    Nick Hillman, HEPI Director

    The history of New Zealand and the history of the UK are closely intertwined. But New Zealand is a small country compared to the UK, with a population of under five million. So it might be expected that New Zealand’s policymakers have more to learn from the UK than vice versa.

    In fact, New Zealand’s smaller size can make it easier to implement innovative new policies. Time after time, it has proved of interest to UK policymakers. For example, in the 1990s, the UK sought to learn from New Zealand’s civil service reforms and in the 2000s, we learnt from their pension reforms.

    Now, as this wide-ranging paper shows, we could learn much from their higher education sector, which is the only one in the world where every single university is in the top 3 per cent globally.

    The potential lessons cover areas such as:

    • the consequences of removing student number controls;

    • the growth of challenger institutions;

    • the retrieval of student loans from graduates who have moved overseas; and

    • the recruitment of international students.

  • 2 Higher Education in New Zealand: What might the UK learn?

    HEPI is a UK-wide body. While it is challenging to keep on top of the volume of change going on in higher education across all four parts of the UK, it is also important that we keep an eye on changes elsewhere in the world. Otherwise, we will miss important lessons for our own higher education sector.

    That is why, in 2014, we published a set of reports looking at the Australian higher education sector and why, in 2015, we published a detailed study comparing the UK and German higher education systems. Now, we shine our spotlight on New Zealand.

    While we hope this study will, above all, provide useful lessons for UK policymakers, we also hope it will be read with interest in Wellington as well as in Westminster.

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    Higher Education in New Zealand

    New Zealand UK

    Population 4.6m 65m

    Universities 8 universities,

    3 wānanga

    141 (151 with degree-

    awarding powers)

    Universities per head 1:575,000 1:461,000

    Students (men:women) - Bachelor's degree or higher 209,000 (1:1.4) 2.3m (1:1.3)

    People aged 25-34 with a diploma or higher qualification (2014) 40% 48%

    % of undergraduates studying part-time 23% 20%

    International students (Bachelor's and higher) as a % of student body 15% 18%

    University staff (FTEs) 20,000 275,000

    Completion rate (within 9 years) 83% 82%

    Average domestic tuition fee (university) £2,718 £8,830

    International fee revenue (universities) £146m £3,240m

    Tertiary education spending as a % of GDP in 2011 (public and private) 1.5% 1.2%

    Research spending as % of GDP 1.16% 1.70%

    World rankings (universities in the 2015/16 QS World Top 500) 8/8 71/141

    Student loan income repayment threshold £8,588 £21,000

    Figures taken from Universities UK, Higher Education in Facts and Figures, 2014; and OECD, Education at a Glance, 2014. Some data also come from the Higher Education Statistics Agency (hesa.ac.uk) and the New Zealand Ministry of Education (educationcounts.govt.nz). The figures are indicative rather than precise and comparisons should be treated with caution.

    Throughout this paper an exchange rate of £1 = 45 NZ cents has been used.

  • 4 Higher Education in New Zealand: What might the UK learn?

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    Introduction 6

    New Zealand’s Tertiary Sector – An Overview 8

    The Cost of Student Loans 15

    Private Providers and the Demand-Led System 25

    Increasing Repayments from Borrowers Overseas 31

    International Recruitment 41

    Governance 50

    Conclusion 54

    Endnotes 56

  • 6 Higher Education in New Zealand: What might the UK learn?


    Despite being far smaller, New Zealand’s higher education sector has many similarities with the UK’s. Universities in both countries generally deliver good outcomes, with graduates enjoying better employment prospects and higher lifetime earnings than those who do not enter higher education. Both countries’ higher education systems perform well in international rankings and have high completion rates.

    New Zealand often adapts ideas adopted in the UK. This includes the introduction of the Key Information Set (KIS). The Performance Based Research Fund resembles the UK’s old Research Assessment Exercise. The New Zealand student loan scheme is modelled, in part, on the Australian system, but is also similar to the income-contingent system in England and enables students to study without paying up front fees.

    The similarities between the two systems mean that they face many of the same challenges. In some cases New Zealand is ahead of the UK in its efforts to tackle them and these are one focus of this paper.

    Addressing the cost of the student loan scheme

    The New Zealand Government has adopted a range of measures to drive down the costs of its student loan scheme. These have included increasing the repayment rate for graduates while also reducing the ability of institutions to raise their fees. In the UK, England has recently considered some similar measures and may wish to go further in the coming years.

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    Private providers and the demand-led system

    Between 1999 and 2002, New Zealand experimented with a demand-led tertiary education sector, while also encouraging private providers to enter the system. Costs soared and number controls were reintroduced. Student number controls in England have been abolished and non-HEFCE funded providers have become a more significant element of the higher education sector. There is therefore scope for New Zealand’s experience to inform policy developments in the UK.

    Securing repayments from domestic students who have gone overseas

    The UK and New Zealand have struggled to ensure graduates who move abroad repay their loans. New Zealand has introduced a number of initiatives to retain contact with overseas students, which go beyond anything in the UK. Legislation which means those behind in their repayments can even be arrested at the border.

    Attracting international students

    With tight public funding, New Zealand’s universities are increasingly reliant on international students as an important revenue stream. In recent years, the country has adopted a detailed and comprehensive strategy which could serve as a template for the UK to follow.

    Given the challenges faced by the two sectors are so similar, it is remarkable that there is not closer collaboration. It is hoped this paper will inform people in the UK of the actions New Zealand has taken and go some way to enabling a greater sharing of experiences to inform future policy work.

  • 8 Higher Education in New Zealand: What might the UK learn?

    New Zealand’s Tertiary Sector – An Overview

    New Zealand has an integrated tertiary education sector of which higher education (degree level and above) is one element.

    Tertiary education covers all levels of post-school education and includes:

    • foundation education (basic literacy and numeracy);

    • applied and vocational training;

    • higher education (degree and postgraduate education); and

    • community education.

    Nearly a third (31 per cent) of the 144,000 students who completed a tertiary qualification in 2013 did so at Bachelor's level or higher.

    Tertiary Institutions

    New Zealand’s tertiary sector consists of a number of different categories of provider, including:

    • Universities – there are eight universities providing extensive degree and postgraduate education, which also host New Zealand’s Centres of Research Excellence.

    • Wānanga - New Zealand’s three wānanga provide education using Māori styles of teaching and learning.

    • Private training establishments (PTEs) – over 200 PTEs, which are not state owned and often specialise in a specific

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    industry or area of study, usually with a vocational focus. Most are approved by the Tertiary Education Commission so receive direct Government funding. Students enrolled on thei